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BPO Philippines: Digital powers growth

by John Saunders
15th Apr 21 3:45 pm

COVID-19 has had a devastating effect on the world’s economy, and the Business Process Outsourcing (BPO) industry in the Philippines has experienced its share of the pandemic pain. As the global economy shrank, demand for BPO services in the Philippines followed suit. After over twenty years of explosive growth, the industry faced the twin challenges of falling demand and the need to ensure their workplaces were compliant with COVID-19 prevention measures.

However, even in this gloomy picture, many BPOs in the Philippines continued to experience growth, at least in parts of their business. Sectors like healthcare, fintech, and e-commerce have thrived during—and sometimes because of—the pandemic. In these sectors, where the trend was towards more online service provision, the demand increased, and with that, the need for BPO services in the Philippines.

BPO companies in the Philippines had established themselves as world leaders in the industry. The sector forms a major part of the Philippine economy, generating £20 billion in annual revenues, 7% of the country’s GDP; it is the second biggest generator of income for the country. The BPO industry in the Philippines employs over 1.2 million people. It is one of the top two destinations for outsourcing and has the world’s largest and leading contact centre sector.

One of the main reasons the Philippines has become a world leader is because of the people. Outsourcing providers in the Philippines have access to a large pool of talented and experienced staff. The size and maturity of the industry creates a sizeable workforce at all levels, which means BPO services in the Philippines can scale quickly to meet demand.

There is a high level of English proficiency in the country, with more English speakers in the Philippines than there are in the United Kingdom (UK). The country’s schools provide a high level of education, while the links between the Philippines and the West means there’s a close cultural affinity. Call centre agents typically have a neutral accent and can understand and use English idioms proficiently, which helps them build a rapport with customers.

Ralf Ellspermann, CEO of PITON-Global, said, “It’s the hard-working and kind-hearted Filipinos that make this the number one outsourcing hub for an ever-increasing number of UK-based companies.” Highlighting the nation’s competitive advantage, he added, “When you have similar service capabilities in, for example, India and the Philippines, the overall outsourcing environment is just more attractive here.”

The nation has also invested heavily in the BPO sector. The industry first took root in the Philippines following a government initiative designed to attract investment. This commitment to the sector continues with policy support. The government has funded training facilities to help people gain employment as well as aligning regulatory frameworks to alleviate any concerns of those who are considering business process outsourcing to the Philippines for sensitive functions like finance or healthcare.

And most importantly for some, the Philippines can offer a significant financial advantage. As with any outsourcing, there are some savings simply from the economies of scale that a specialist provider can offer. However, the biggest saving comes from labour costs, which can be up to 60% lower than the UK. This means that companies can purchase services for significantly less than in-house or domestic provision but still expect to maintain or even improve service quality.

The combined effect is that the Philippines are well-placed to serve those sectors that have grown during the pandemic. Sectors like healthcare, e-commerce, and fintech have benefited from the move away from in-person customer support. Other sectors like online education and on-demand work (or the gig economy) have also found that the indirect effects of the pandemic have increased demand.

PITON-Global’s Ellspermann has found himself dealing with more and more companies looking to outsource to the Philippines. “We have seen an exponential increase in enquiries coming from companies that are operating and thriving in the digital space. We are currently in contact with a number of high-growth, UK-based companies.” The common factor they all share, he explained, is looking for BPO solutions to provide high-quality services at scale.

“Yes, many of them are looking for savings, but more importantly, they need world-class BPO solutions that can quickly be scaled to meet their growth targets. All, of course, without losing the focus on quality. Cost savings are meaningless if you cannot obtain services of equal or higher quality when you migrate your BPO requirements offshore to the Philippines.”

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